NCAA accused of interfering on deal to sell football bowl

Plaintiff solely to blame for its business failures, says defense, and jury agrees

In a lawsuit filed in 1st Circuit Court for the State of Hawaii, plaintiff Aloha Sports, Inc. (ASI) sought damages from defendant National Collegiate Athletic Association (NCAA) on claims of antitrust, breach of contract, and tortious interference with a prospective business advantage. (Note: Though this case was tried in Hawaii, lead defense counsel is based in Ann Arbor.)

ASI was a post-season football bowl operator, running the Aloha Bowl and Oahu Bowl, until the NCAA refused to recertify ASI’s bowl games because of mismanagement. ASI moved both bowl games to the continental U.S. after its attempts to hold the bowls in Hawaii were unsuccessful.

The San Francisco Bowl never got off the ground, and was decertified by the NCAA’s football certification subcommittee before it was ever played. The Seattle Bowl was held in 2001 and 2002, and both games were marked by low attendance, subpar experiences for the student-athletes, and creditors lining up to get paid for their services, including the schools and conferences that participated in the games.

ASI applied to the NCAA for recertification for the 2003 Seattle Bowl. The NCAA’s football subcommittee considered ASI’s application, applied the criteria used to evaluate bowl operators set out in the NCAA Handbook, and concluded that, based on the criteria, the Seattle Bowl should not be recertified for 2003.

At the time ASI appeared before the NCAA football certification subcommittee, ASI was attempting to sell the Seattle Bowl. The contemplated, but never consummated, deal was contingent upon the recertification of the bowl game.

After the NCAA’s football certification subcommittee decertified the Seattle Bowl, ASI filed suit in federal court in 2004, alleging that: the NCAA’s rules governing bowl games were anti-competitive; the NCAA failed to follow its own rules in decertifying the bowl games, which constituted breach of contract; and the NCAA tortiously interference with ASI’s proposed deal to sell the Seattle Bowl.

During pretrial motions, ASI moved to voluntarily dismiss its state antitrust and breach of contract claims. The tortious interference with a prospective business advantage claim proceeded to jury trial.

Plaintiffs asserted that defendant had maliciously interfered with its deal to sell the Seattle Bowl. It also was contended that an NCAA staff member, who was not a member of the certification subcommittee, harbored personal animus toward ASI’s owners and, for that reason, the subcommittee did not recertify the bowl game.

Defendant contended that there was no personal animus toward plaintiff’s shareholders; that the subcommittee’s decision was governed by the criteria set out in the NCAA rules; and that plaintiff’s application did not meet the criteria. It was further asserted that plaintiff was a victim of its own business failures.

The jury found for the defendant and issued a no-cause-of-action verdict.

Type of action: Antitrust, breach of contract, tortious interference with a prospective business advantage